Key facts
- China has implemented detailed tax rules for offshore trusts.
- A 20% personal income tax will be levied on offshore trusts.
- The tax applies to the establishment, operation, and liquidation of these trusts.
- The measures target wealthy individuals using offshore structures to avoid taxes.
- Assets transferred into trusts will be taxed on their appreciation at the time of transfer.
- Income generated by trusts will be subject to an annual 20% tax.
China has issued detailed tax rules for offshore trusts, establishing a 20% personal income tax that will apply at the stages of establishment, operation, and liquidation. The measures, released by the Ministry of Finance and the State Taxation Administration, are designed to close loopholes that have allowed some wealthy individuals to use low-transparency jurisdictions to conceal assets and evade taxes.